2008_04_08_Notes

2008_04_08_Notes - UP FRONT Reading for next time...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
UP FRONT, 4-3-08 Reading for next time: 399-403 (introduction to “valuing the environment”) and 411-420 (travel cost method of valuing a park or other attraction) o “MCS” stands for Marshallian consumer surplus. o “V i ” is visits from the ith origin or zone.  In  some models, each individual has his or her  own origin. o For reading 411-420, note also the other  symbol definitions on page 411. Tonight 7:30, Goldwin Smith 142, “What  Would Jesus Buy?” Outline for Today 1) Pollution fee vs. pollution reduction subsidy,  continued
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2) Introduction to cost-benefit analysis 3) Inter-temporal discounting, which is often important in cost-benefit analysis
Background image of page 2
Pollution fee vs pollution reduction subsidy In the short run Assume : Price of good is fixed Tax rate t = subsidy rate s > 0 VC(0,0) = 0 Symbols : p: Price of the good y y: Quantity of good output e: Quantity of emissions FC: Fixed cost. Unavoidable in the short run. VC(y,e): Total variable cost of producing y and e, excluding fee payments Firm is charged te :
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Pollution fee vs pollution reduction subsidy In the short run Let ê be a fixed quantity of emissions greater than what the firm would choose with no subsidy. Firm receives s(ê-e) : Same result with subsidy as with tax?
Background image of page 4
Pollution fee vs. pollution reduction subsidy In the long run Suppose : 1. emissions e i are proportional to goods output y i . 2.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 13

2008_04_08_Notes - UP FRONT Reading for next time...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online